The mortgage aid plan would let the Federal Housing Administration back $300 billion in new, cheaper home loans for an estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans.

An 83-9 vote put the plan on track for Senate passage as early as Wednesday, but President Bush is threatening a veto, and Democrats are fighting each other over key details. Those challenges will probably delay any final deal until mid-July.

The bill advanced as separate reports underscored rising economic anxiety: Consumer confidence slid to its lowest level in more than 16 years, and closely watched indices showed a continuing decline in home values.

At the Capitol, Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the lending measure “would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country.”

“We need to demonstrate to people in this country that have lost an awful lot of faith in almost everything, but certainly in (Congress), that we can get something done, that we can put aside differences and make a difference in their lives,” Dodd said.

Still, conservative Democrats known as “Blue Dogs” are concerned about how to pay for the measure, and members of the Congressional Black Caucus call it unacceptable, arguing it doesn’t do enough to address the needs of black Americans.

Congressional leaders also are divided on how high to place loan limits that apply to government mortgage insurance and financing. The Senate bill sets those limits at $625,000 while a House-passed version puts them at $730,000 — a crucial difference in high-cost housing markets like California, home to House Speaker Nancy Pelosi.

Lawmakers have been negotiating behind the scenes with the Bush administration to avert a veto. Dana Perino, the White House spokeswoman, told reporters the Senate measure has “some really good aspects” and Congress is “on the right path.”

“We have been working closely with them to try to change the bill in a way that we think that it could be something that the president could sign,” Perino said.

Borrowers would be eligible for the housing rescue if their mortgage holders were willing to take a substantial loss and allow them to refinance, and if they could show an ability to make payments on the new loan. They would ultimately have to share with the government a portion of any profits they made from selling or refinancing their properties.

The bill also would tighten controls and create a new regulator for Fannie Mae and Freddie Mac, the mortgage giants that provide huge amounts of cash flow to the home loan market by buying loans from banks.

It would provide a $14.5 billion array of tax breaks, including a credit of up to $8,000 for first-time homebuyers who buy in the next year. And it would boost low-income tax credits and mortgage revenue bonds. The measure falls $2.4 billion short of covering the costs of those tax items, a sort point for Blue Dogs who oppose initiatives that add to the deficit.

Mixing in a controversy involving lawmakers, Republicans and Democrats on the Ethics Committee proposed adding mortgage disclosure requirements for members of Congress to the bill following a flap over reports that Dodd and Sen. Kent Conrad, D-N.D., got preferential home loans from Countrywide Financial Corp., a lender at the center of the subprime mortgage mess. The proposal by John Cornyn of Texas, the senior Republican on the committee, and Barbara Boxer, D-Calif., the chairman, would remove an exception that currently allows lawmakers to omit home mortgages from their annual financial disclosures.

On the broader bill, the 42 House members of the Black Caucus said in a letter to Democratic leaders last week that it has “glaring omissions,” including affordable housing funds for states affected by Hurricane Katrina and grants for states and localities to buy and fix up foreclosed properties.

Some Republicans, however, are still vehemently opposed to the legislation, which they describe as a government giveaway for reckless lenders and investors.

“They expect the federal government to turn their backs on responsible lenders and borrowers and renters waiting — waiting — to become first-time homeowners, and support those groups that have pushed our housing market into decline with bad loans and bad investments,” said Sen. Mike Enzi, R-Wyo. “This bill is a federal government bailout.”

The Senate bill would provide $3.9 billion in grants to deal with foreclosed properties — a House plan would provide $15 billion — but the White House singled out the funds in its veto threat, and Blue Dogs are demanding that the money be offset with cuts elsewhere.

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, has said he’d be willing to jettison the money and add it to a separate measure in the interest of a deal.

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